15 October 2025

Retaining Profit in the Company – additional benefits

Is retaining profit in the company a relevant topic? The end of the tax year is quickly approaching, and with it comes a summary of each taxpayer’s profits. This is also an excellent opportunity to explore additional tax advantages and savings. For instance, taxpayers can benefit from potential interest on retained profits.

Retaining Profit – how it works?

Pursuant to Article 15cb of the Corporate Income Tax Act, taxpayers can deduct hypothetical interest from their tax-deductible costs. This interest is calculated by multiplying the National Bank of Poland (NBP) reference rate (applicable on the last business day of the year preceding the tax year), increased by 1 percentage point, by the amount of profit transferred to the company’s supplementary or reserve capital, or contributions made to the company in accordance with the principles of separate regulations.

The company is entitled to this tax-deductible cost in the year in which the additional contributions were made or the supplementary or reserve capital was increased, and in the following two tax years.

In 2025, the National Bank of Poland (NBP) reference rate of 5.75% (+1%) will be used to determine hypothetical interest. The total tax-deductible costs for hypothetical interest cannot exceed PLN 250,000. In practice, retaining profits allows for additional tax benefits – up to the maximum tax limit – of up to 47,500 PLN.

The tax benefit is as follows:

Amount of retained profits	Tax-deductible costs	Tax savings
1 000 000 PLN	67 500 PLN	12 825 PLN
2 000 000 PLN	135 000 PLN	25 650 PLN
4 000 000 PLN	250 000 PLN*	47 500 PLN

 

*Due to the limit, a maximum of 250,000 PLN can be included in the tax-deductible costs; the remaining costs calculated according to the formula can be settled in the next two tax years.

What should you pay attention to?

It is important to note that both the refund of the additional payment and the distribution and payment of profits cannot occur until at least three years have passed from the end of the year in which the payments were made or withheld. If the additional fee or profit is refunded before this time, the taxable income (excluding interest and adjustments) must be calculated continuously.

Furthermore, tax preferences do not apply in situations where additional payments or retained profits were used to cover balance sheet losses.